Thursday, 26 January 2017

Facebook has copied another major Snapchat feature in its quest to take out its rival

Facebook is not taking the growing threat of Snapchat lying down.

The U.S. social networking giant is testing another feature that imitates its rival called Stories.

It's a collage of photos and videos that users upload via the main Facebook app which then disappear after 24 hours. Snapchat's own feature, also called Stories, is built on the same concept.

Last year, Facebook introduced Stories on its photo sharing app Instagram. In the few months that it has been active, Instagram Stories has already reached 150 million daily users. The main Instagram app has 600 million monthly active users. Given that Facebook has 1.2 billion daily active users, Stories could prove popular. In comparison Snapchat has a reported 150 million daily users.

Little circular icons will appear at the top of a person's Facebook News Feed. When a user opens one of these, a story will begin to play, but it will only be available for 24 hours before disappearing.
Facebook has copied another major Snapchat feature in its quest to take out its rival



"The way people share today is different to five or even two years ago — it's much more visual, with more photos and videos than ever before. We want to make it fast and fun for people to share creative and expressive photos and videos with whoever they want, whenever they want," Facebook said in an emailed statement to CNBC.

Facebook is testing this feature in Ireland for now.


New ad revenue stream?

The Stories feature could address two major challenges facing Facebook. Firstly, a report in The Information last April suggested that users are posting fewer personal updates. Stories could be a way to keep people engaged with the main Facebook News Feed.

Secondly, Facebook warned in November that ad load in the News Feed – the number of ads shown – could come down "meaningfully" in 2017 because the social networking giant doesn't want to overload users with ads. This is why it has looked at some of its other products such as Instagram and the standalone app Messenger to experiment with ads. On Wednesday, Facebook said it is beginning to test ads in Messenger in Australia and Thailand. Stories could provide a new place for Facebook ads.

"One of Facebook's big initiatives within its own apps and third party is promotion of native advertising, ads that fit in with the look and feel of the app. Stories can be viewed as part of that," Jack Kent, senior mobile analyst at IHS Markit, told CNBC by phone on Thursday.


Facebook fights back

Facebook has been pretty obvious in the way that it has imitated Snapchat's features from disappearing messages to the ability to draw over pictures. Some in the market have suggested Snapchat is a real threat to Facebook when it comes to challenging for ad money. Martin Sorrell, the CEO of the world's biggest advertising agency WPP, told CNBC earlier this month that he thinks Facebook is "concerned" about the potential opposition that Snapchat poses.

That's why Facebook has been aggressive in producing rival services, and it could pay off in areas where Snapchat does not have a strong foothold, according to analysts.

"I think Snapchat has a very engaged audience and it's strong in North America, and with a young audience. There might be a risk that if Facebook rolls Stories out into countries where Snapchat isn't as well penetrated, it could impact Snapchat's growth opportunities in areas where Snapchat isn't as big," Kent said.

Snap – the owner of Snapchat – has yet to respond when contacted by CNBC.

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